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Sen. Cynthia Lummis and other Senate Republicans released a 630-page revised Clarity Act text on Thursday ahead of the Senate's first procedural vote on Sept. 15. The bill includes more than 114 provisions requested by Democrats and adds rules for “non-decentralized finance trading protocols,” including registration with the Commodity Futures Trading Commission. Its path to President Donald Trump's desk remains difficult as Democratic support and disputes over stablecoin rewards, illicit finance and ethics remain unresolved.
Why it matters
The revision tackles a central regulatory question: when a DeFi protocol is controlled or materially altered by a person or group, who falls under federal oversight? The text covers people acting in concert who can control or materially alter a protocol's functionality, operation or consensus rules. Those non-DeFi protocols would need to register with the CFTC, with the CFTC and Treasury writing the rules.
The new DeFi provisions apply only to spot and cash digital commodity transactions. Lummis said that language addresses tribal government concerns about prediction markets and argued that legislation would give the industry a lasting framework.
Market impact
The revision is a constructive step toward federal rules for digital commodities and DeFi, but the Sept. 15 vote is the immediate test. The latest text has not secured Democratic support, and the Senate returns with limited time to advance it.
The remaining fight includes ethics provisions tied to Trump's crypto wealth from World Liberty Financial and his TRUMP memecoin. The current language bars public officials, employees and spouses from issuing or sponsoring digital assets, gives enforcement to the Justice Department and expires in January 2029.
Frequently asked questions
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How would the bill regulate non-DeFi protocols?
The bill covers people acting in concert who can control or materially alter a protocol's functionality, operation or consensus rules. Those protocols would register with the CFTC, while the CFTC and Treasury would write the rules.
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Why are the DeFi provisions limited to spot and cash transactions?
Lummis said the limitation addresses tribal government concerns about the Clarity Act's effect on prediction markets.
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When is the Clarity Act's first Senate vote?
The first procedural vote is set for Sept. 15, when the Senate returns to Washington with limited time to advance the bill.
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What political hurdles still face the revised bill?
The latest text has not secured Democratic support. Disputes over stablecoin rewards, illicit finance and ethics remain unresolved.
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What does the ethics language say about digital assets?
It bars public officials, employees and their spouses from issuing or sponsoring digital assets. The Justice Department would enforce the provision, which expires in January 2029.
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